Financials Lift European Markets

123jump.com Staff
18 Apr, 2008
New York City

European markets surged after a rally in the U.S. lifted financial stocks. Banks in Europe took advantage of recovering financial markets and offered bonds wirth 12 billion euro. The Spanish government passed fiscal stimulus package of 18 billion euros to bolster the falling economy on weak housing market. Every Spanish tax payers and pensioners will receive 400 euros this year and 8 billion euros are earmarked to distribute next year.

10:00PM Frankfurt, 4:00PM New York, 8:00AM Sydney –[R]Rally in the U.S. stocks lifted markets across Europe.[/R]

Global Markets Update

The Spanish government passed fiscal stimulus package of 18 billion euros to bolster the falling economy on weak housing market. Every Spanish tax payers and pensioners will receive 400 euros this year and 8 billion euros are earmarked to distribute next year. The government hopes that weakness in the housing market does not broaden into the wider economy.

Banks in Europe took advantage of recovering financial markets and offered bonds wirth 12 billion euro. Banco Santander, Intensa and UBS led the offering. Royal Bank of Scotland is likely to raise between 5 billion and 10 billion pounds according to various media reports in the UK.

Bauer AG, German construction company rose 2% after it reported net income for 2007 of 74.4 million euros from 35.2 million a year ago and is likely to pay a dividend of 1 euros.

Bic SA fell 11% after it reported net income in the first quarter declined 39% to 25.1 million euros from 41.2 million a year ago on 16% fall in sales.

U.S. stocks advance after solid earnings from Google, Caterpillar, Honeywell and BB&T. Citigroup reported a loss of $1.02 per share and wrote down $13 billion in assets and credit losses of $2 billion. Google surged 20% after its revenue rose 46% and earnings increased 30% in the first quarter. Honeywell and Caterpillar gain 6% and Citigroup soars 7%.

Citigroup, exactly after a decade of mega merger put together between Citibank and Travelers reported its second quarterly loss in a row. Citi reported a loss of $1.02 per share compared to net income of $1.01 a year ago after revenue plunged 48% to $13.2 billion in the first quarter. Citigroup, sprawling conglomerate of international banking, insurance and investment broker employs 300,000 people. The bank has still not announced plans to reduce its payroll and high cut operating costs.

The ONS reported that March UK public sector budget deficit rose to £3.6 billion and net borrowings rose to £10.2 billion. Royal Bank of Scotland is expected to announce a plan to raise £10 billion to bolster its balance sheet. Council of Mortgage lenders reported mortgage lending in March fell 17% from a year ago and rose 5% from February. Kazakhmys and Eurasian Natural fell after Kazakhstan said it may impose a customs duty on exporters of metals and other mining industry.

Stocks in Japan edged higher on the optimism that global economy may not weaken further. Nikkei 225 rose 0.6% to 13,476.45, a 1.2% gain for the week, and the broader Topix Index increased 0.8% to 1,304.06. Yen weakened further to close at 102.36 yen to a dollar. Shipping lines, banks and export sensitive stocks close higher. The Bank of Japan in its region survey noted that eight of the nine regions are experiencing sluggish economic activities.

European Markets indexes

In London FTSE 100 Index closed higher 76.10 or 1.27% to 6,056.50, in Paris CAC 40 Index increased 99.55 or 2.05% to close at 4,961.69 and in Frankfurt DAX index higher 161.27 or 2.41% to close at 6,843.08. In Zurich trading SMI increased 244.39 or 3.41% to close at 7,418.02.

North American Markets indexes

Dow Jones Industrial Average gained 228.87 or 1.81% to a close of 12,649.64, S&P 500 closed up 24.78 or 1.81% to 1,390.34, and Nasdaq Composite Index increased 61.14 or 2.61% to close at 2,402.97. In Toronto TSX Composite closed up 111.91 or 0.79% to 14,227.41.

Of the 30 stocks in Dow Jones Industrial Average, 26 closed higher, 4 closed lower, and none was unchanged.

Caterpillar led gainers in the Dow Jones index with a rise of 8% followed by increases in Citigroup of 4.7%, in AIG of 4.25%, in Bank of America of 2.6% and Microsoft of 2.57%.

Coca Cola led decliners in the index with a loss of 1.2% followed by losses in Procter & Gamble of 0.7%, in Wal-Mart of 0.6% and in AT&T of 0.08%.

Of the stocks in S&P 500 index, 405 stocks increased, 94 declined, and 1 was unchanged. Of the stocks in the index, 3 stocks fell more than 3% and 101 gained more than 3%.

Capital One Financial led the decliners in the S&P 500 index with a loss of 3.6% followed by losses in Huntington Banc of 3.49%, in Western Union of 3.27%, in Newmont Mining of 2.8%.

Google led gainers in the S&P 500 index with a surge of 20% followed by gains in Cummins of 12%, in E*Trade of 9.7%, in CIT Group of 8.6%, in Amazon.com of 8.44% and Eaton Corp of 6.8%.

South American Markets Indexes

Colombia led gainers in the South American trading with a rise of 2.00% followed by increases in Argentina of 1.14%, in Brazil of 0.57%, and in Mexico of 0.03%. Venezuela fell 0.7% and Peru declined 0.40%.

Asian Markets

In Tokyo Nikkei 225 Index closed higher 78.15 or 0.58% to 13,476.45, in Hong Kong Hang Seng index decreased 61.18 or 0.25% closed to 24,197.78. In Australia ASX 200 index lower 89.30 or 1.62% to close 5,429.70. In Malaysia KL Composite index increased 11.11 or 0.88% closed to 1,267.65.

In South Korea Kospi Index increased 3.23 or 0.18% to close at 1,771.90, in Thailand SET index closed lower 0.03 or 0.00% to 845.40 and Indonesia JSE Index edged increased 7.49 or 0.32% to 2,349.27. Market of India was closed today.

Commodities, Metals, and Currencies

Crude oil increased $1.88 to close at $116.74 a barrel for a front month contract, natural gas increased 20 cent to $10.58 per mBtu, and gasoline futures increased 3.02 cents to close at 297.70 cents per gallon.

Gold decreased $27.70 in New York trading to close at $915.20 per ounce, silver closed down $0.48 cents to $17.82 per ounce, and copper for front month delivery decreased 2.20 cents to $3.8925 per pound.

Wheat futures increased 28.5 cents in Chicago trading and closed at $9.39 per bushel. Sugar decreased 1.00 cent to $13.29 per pound. Soybean future closed up 10.50 cents to $13.77 a bushel.

Dollar edged higher and traded at a record low against euro to $1.581 and edged lower against yen to 101.75.

Yields on U.S. bonds increased to 3.73% with 10 years of maturities and increased 4.51% with 30-year of maturities.